Could I have seen this coming? Or, did I see this coming and fail to take advantage?
Day-trading is a psychological minefield, not only because it intensifies our natural human craziness by placing clear dollar amounts on our mistakes, but there is no time to pause and reflect upon the mental mechanisms that may lead us astray.
So here's an attempt to help my fellow traders out there (and i'm doing this for free! aren't i wonderful?):
1 -- do something quickly to balance your perspective:
a. Actively think of how badly something could have gone and really really enjoy the feeling that that bad thing didn't happen. For example, you look at Ford's recent peak, and then you look back to the nadir the day before. You look at that nadir and mentally draw a new line downwards. Then you make that downward slope 4 time as steep. make it go waaaaaaay down. Now you're like -- wow. i'm all the way up here at 0. awesome.
b. find someone that took a big hit today and shamelessly judge that person in your head. (e.g. Ha ha! At least I'm not that Enron trader...).
c. think of all those people that failed the interview process, and think -- heh heh, well at least I'm here playing the game. i'm not like those losers sitting at home watching oprah and eating frosting from a tube.
2. Quickly think of a way to make money NOW, given the psychology of missed/seized opportunities...
a. trust that you're not the only one feeling whatever you're feeling. and trust that there are also a bunch of people feeling the opposite of what you're feeling, in an equally intense way. and USE that info. don't just sit there. assess just how intense the regret is, and make a judgment as to wehther the 'winners' are distracting themselves by basking in their win, or whether they're fearing a breaking point and preparing themselves to sell. And then DO something to make money off of that judgment--sell short, anticipate where they will put their money when/if they sell, or BUY! just because it has spiked a little doesn't mean you can't ride the wave for 3% or so.
b. trust that if you're not interested in thinking about it, you're not interested. full stop. There is always a better deal. A shiny new ford taurus may look good to a 12 year old in Kansas, but when you show this 12 year old a shiny new porsche 911 turbo (as i have referenced before), the shiny new ford starts looking....wait was I talking about something? mmmm, 911 turbo...
ok, enough of this nonsense, i've got some stocks to sell...
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